LUTZ BUSINESS INSIGHTS
creating a product record in quickbooks
AMANDA HARPSTER, CLIENT ACCOUNTING SERVICES MANAGER
When you started your business, you may have been able to get away with tracking your inventory on index cards and/or Excel. When you reach a certain point in your growth, though, you need better tools for this task. QuickBooks supplies them. The first step in this complex process is the creation of Item records.
To get started, click the Items & Services icon on the home page (or Lists | Item List). Click the arrow next to Item in the lower left, then New. If you buy and sell products, you’ll need to select Inventory Part under TYPE. There are other options you may use in some situations, like Service.
You’ll need to provide a lot of information in this window, and you may not always know what to enter. We recommend you consult with us if you are going to work with inventory management, since it can be complicated, and your records must be precise.
Some of the fields require only simple answers. You’ll enter an Item Name/Number and, optionally, a Manufacturer’s Part Number. You’ll write the brief descriptions that will appear on purchase and sales transactions. Since you both buy and sell products, you’ll be asked to provide your own cost for procuring them and the prices you charge customers. Two more easy questions: Do you have a Preferred Vendor? And will you charge sales tax?
There are times when you will be asked to assign accounts to records and transactions in QuickBooks. This is one of them. Your overall bookkeeping and your reports depend on the accuracy of your choices.
Your COGS Account (Cost of Goods Sold) is the easiest to identify, since your Chart of Accounts has a matching account. But what Income Account should you select? Which Asset Account? These are the kinds of questions we can help you answer.
As you’re working with an item record, you’ll notice a section at the bottom labeled INVENTORY INFORMATION. You’ll supply two numbers here. How many of these items do you currently have? And at what point do you want to reorder? QuickBooks calculates a third number for you: your Average Cost. We can explain why this is important to know.
Once you start buying and selling items, three of the numbers in the INVENTORY INFORMATION section will continue to change. Your quantity On Hand will reflect what you’re buying and selling in real time. QuickBooks will also track how many items have been promised on sales orders and ordered on purchase orders.
If you are conscientious about creating accurate, comprehensive item records and transactions, you’ll find that QuickBooks’ reports can help tremendously as you make purchasing and sales decisions. We can help ensure that you’re approaching this critical task with the thoroughness and precision it requires. Contact us, and we’ll set up a consultation.
ABOUT THE AUTHOR
AMANDA HARPSTER + CLIENT ACCOUNTING SERVICES MANAGER
Amanda Harpster is a Client Accounting Services Manager at Lutz with over 14 years of relevant experience. She focuses on QuickBooks support, tax and payroll compliance, and small business consulting.
AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
- Intuit Certified ProAdvisor, QuickBooks
- BSBA in Accounting, University of Nebraska, Omaha, NE
- St. Patrick’s Parish, Volunteer
- Cub Scout Pack #409, Treasurer
- Ponca Hills Fire Department Women’s Auxiliary, Member
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QUICKBOOKS PROADVISOR CERTIFICATIONS
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